Introduction
In order to provide ease to our valued clients, Khilji and Co is please to publish the commentaries of Multiple Notifications from FBR and Punjab Revenue authority in single transmittal document.
1.
ISSUING AUTHORITY: FEDERAL BOARD OF REVENUE (FBR)
POWERS EXERCISED U/S: 74 OF STA, 1990
NOTIFICATION NO: C.No. 2 (1)/ST & FE/Misc./2019
DATE OF ISSUANCE: APRIL 2, 2020
EFFECTIVE FROM: WITH IMMEDIATE EFFECT (i.e. APRIL 2, 2020)
VALID UP TO: TILL APRIL 30, 2020)
CONDITION: TIER-I RETAILERS SHALL FURNISH IN WRITING THEIR WILLINGNESS TO INTEGRATE ALL THEIR POS’s TO THE RESPECTIVE RTOs/LTUs LATEST BY APRIL 20, 2020
AMENDMENTS MADE IN: CHAPTER XIV-AA OF STR, 2006
RELEVANT RULE: 150ZEA OF STR, 2006
TITLE: EXTENSION IN DATE FOR ONLINE INTEGRATION OF TIER-I RETAILERS
COMMENTARY: The aforementioned SRO is issued to facilitate the Tier-I retailer as defined in section 2(43A) of STA, 1990 who are yet to be enrolled to get their retail system integrated with FBR computerized system for real time reporting of sales. The date for enrollment has been extended till 30th April 2020.
CONSEQUENCES (IF ANY)
AFTER DUE DATE: If TIER-I retailers failed to comply, the tax office would compulsorily register them under section 14 of the Sales Tax Act, 1990 read with Rule 6 of the Sales Tax Rules, 2006 without any further notice. Further even if these tier-I retailers did not comply the said requirement even after compulsorily registration then tax office may not only impose penalty under clause 7 of section 33(1) of the Sales Tax Act, 1990 but also arrest them and initiate prosecution under section 37A of the Sales Tax Act, 1990.
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2.
ISSUING AUTHORITY: PUNJAB REVENUE AUTHORITY (PRA)
POWERS EXERCISED U/S: 6(3) OF PIDC ACT 2015
NOTIFICATION NO: PRA/ORDER.06/2019IDC/1538
DATE OF ISSUANCE: APRIL 2, 2020
EFFECTIVE FROM: WITH IMMEDIATE EFFECT (i.e. APRIL 2, 2020)
VALID UP TO: FOR 3 MONTHS (i.e. TILL JUNE 30, 2020)
TITLE: EXEMPTION FROM THE PAYMENT OF WHOLE AMOUNT OF CESS (i.e. the infrastructure cess levied and collected under the Act and includes default surcharge or penalty or any other sum payable) AGAINST IMPORT OF ALL GOODS (i.e. classifiable under the First Schedule to the Customs Act)
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3.
ISSUING AUTHORITY: FEDERAL BOARD OF REVENUE (FBR)
POWERS EXERCISED U/S: 237(1) ITO, 2001
NOTIFICATION NO: SRO. 274(I)/2020
DATE OF ISSUANCE: APRIL 2, 2020
EFFECTIVE FROM: WITH IMMEDIATE EFFECT (i.e. APRIL 2, 2020)
AMENDMENTS MADE IN: SRO 111(1)/2020 DATED FEB 14, 2020
RELEVANT CHAPTER: XVIA OF INCOME TAX RULES, 2002
TITLE: RECOVERY OF TAX FROM PERSONS HOLDING MONEY ON BEHALF OF A TAXPAYER
COMMENTARY RULE 210A:
DEFINITIONS The terms “tax recovery”, “defaulter” and “notice” are defined for the purpose of recovering any tax due by a taxpayer under the Ordinance.
“Tax Recovery” means recovery of debt due to the Federal Government under ITO, 2001.
“Defaulter” means the taxpayer mentioned in the notice
“Notice” means a notice issued u/s 140(1) of the ITO, 2001.
COMMENTARY RULE 210B:
NOTICE OF RECOVERY 1. Notice u/s 140(1) of the Ordinance shall be issued by the Commissioner.
- Notice shall be in the form as prescribed under rule 69
- Approval is required from Chief Commissioner IR however before giving approval CCIR will satisfy himself that
* Service of order
* No refund due to the defaulter is available for adjustment
* Pendency of any appeal effect or rectification application before Commissioner
- Notice shall be issued before expiry of due date u/s 137
- Recovery under Chapter XVIA shall be independent of recovery under Chapter XVI
COMMENTARY RULE 210C:
SERVICE AND COMPLIANCE 1. Notice shall be served on the person in the manner provided in
OF NOTICE section 218 of the Ordinance
- Copy of notice shall also be forwarded to the defaulter/Joint account holders at his/their last known address
- The person shall remit money to the Commissioner on the same day the notice is served or where the money is to become due for payment to the defaulter at a future date, on the same day it becomes due.
Proviso Where the person is liable to make series of payment to the taxpayer, the Commissioner may specify the amount to be paid out of each payment until tax due has been paid.
- Recovery shall be restricted to the extent of tax due
Proviso Where the money is held jointly with any person other than the defaulter, the shares of the joint holders in such account shall be presumed until the contrary is proved to be equal.
- Person to whom notice is issued for recovery shall be bound by law to comply
COMMENTARY RULE 210D:
DETERMINATION OF DISPUTE 1. The dispute relating to the notice shall be determined by the Commissioner.
- Decision to be made within thirty days of preference of claim or making of objection.
COMMENTARY RULE 210E:
APPEAL 1. Appeal shall be lodged as under:
| Order Passed By | Appeal to |
| Commissioner under rule 210D | Chief Commissioner concerned |
| Officer of Inland Revenue to whom power have been delegated under rule 214D | Commissioner Concerned |
- Notice of appeal hearing shall be served to the concerned parties.
- After hearing the competent authority passed an order to
* confirm
* modify
* reverse or
* remand the case for fresh decision being consistent with rules mentioned
COMMENTARY RULE 210F:
RECEIPT OT BE GIVEN Commissioner shall issue a receipt of the amount so received from the person(s) holding money on behalf of the taxpayer and such amount shall be considered to have been paid under the authority of the taxpayer.
COMMENTARY RULE 210G:
WITHDRAWAL OF NOTICE The notice shall remain in force until withdrawn by the Commissioner.
COMMENTARY RULE 210H:
FAILURE TO COMPLY 1. The person to whom notice is issued shall be personally liable to the Commissioner who may pass an order u/s 140(5) of the Ordinance.
- Order u/s 140(5) shall only be issued after providing opportunity of being heard to the person.
- The person failing to comply with notice shall be entitled to recover the tax from the defaulter.
- The Commissioner may proceed to recover the tax from the defaulter until the entire amount is recovered either from the person or the defaulter.
COMMENTARY RULE 210I:
BOARD MAY ISSUE INSTRUCTIONS 1. The authority lies with BOARD who may specify procedure to regulate recovery.
- Any instructions issued earlier shall continue in force unless rescinded.
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4.
ISSUING AUTHORITY: PUNJAB REVENUE AUTHORITY (PRA)
POWERS EXERCISED U/S: 5(1) OF PSTSA 2012
NOTIFICATION NO: SO (TAX) 1-110/2020 (COVID-19)
DATE OF ISSUANCE: APRIL 2, 2020
EFFECTIVE FROM: WITH IMMEDIATE EFFECT (i.e. APRIL 2, 2020)
VALID UP TO: FOR 3 MONTHS (i.e. TILL JUNE 30, 2020)
AMENDMENTS MADE IN: SECOND SCHEDULE TO PSTSA 2012
TITLE: TAX RELIEF PACKAGE AGAINST COVID-19 FOR AFFECTED SECTORS
SECOND SCHEDULE
(TAXABLE SERVICES)
(SEE SECTION 3)
| S.No | Description | Classification (If applicable) | Rate of tax (Existing)
Before April 2, 2020 |
Rate of tax (Substituted)
From April 2, 2020 |
Condition/
Remarks |
| 98.01 Services provided by hotels, restaurants, marriage halls, lawns, clubs and caterers. | |||||
| 1 | Services provided by hotels, motels, guest houses | 9801.1000 | 16% | 0% | i) Without input tax adjustment for non-corporate, non-franchise, non-chain businesses; and
ii) 16% for others (i.e. corporate sector) |
| Services provided by marriage halls and lawns (by whatever name called) including pandal and shamiana services | 9801.3000 | 16% | 0% | Without input tax adjustment | |
| Catering services (including all ancillary/allied services such as floral or other decoration, furnishing of space whether or not involving rental of equipment and accessories) | 9801.5000 | 16% | 0% | Without input tax adjustment | |
| Clubs including race clubs and their membership services including services, facilities or advantages for a subscription or any other amount to their members | 9801.4000 | 16% | 16% | –
|
|
| 98.13 Services provided by banking companies, insurance companies, cooperative financing societies modarbas, musharikas, leasing companies, foreign exchange dealers, non-banking financial institutions and other persons dealing in any such services [Emphasis supplied] | |||||
| 7 | Services provided in respect of insurance to a policy holder by an insurer, including a re-insurer for:
(a) fire insurance; (b) goods insurance; (c) health insurance; (d) life insurance; (e) marine insurance; (f) theft insurance; and (g) any other insurance.
EXCLUDING: (a) marine insurance for export; and (b) crop insurance.] |
98.13 | 16% of the gross premium paid | 0% | i) Without input tax adjustment for health and life insurance; and
ii) 16% of gross premium paid for others |
| 98.14 Services provided by architects, town planners, contractors, property developers or promoters, interior decorators. | |||||
| 14 | Construction services and services provided by contractors of building (including water supply, gas supply and sanitary works), roads and bridges, electrical and mechanical works (including air conditioning), horticultural works, multi-discipline works (including turn-key projects) and similar other works but:
EXCLUDING: (i) where the tax is otherwise paid by registered persons as property developers, builders or promoters for building construction; or (ii) where the construction work is funded under an agreement of foreign grant-in-aid or involves construction of consular buildings; or (iii) residential construction projects where the covered area does not exceed 10,000 square feet for a house and 20,000 square feet for an apartment except where construction services are provided to construct more than one house or more than one apartment building.] [Explanation– Notwithstanding the rate of 5% fixed in column 4, the following further reduced rates shall be applicable: (a) one per cent for all services specified at S.No.14 without input tax credit or adjustment to the extent of Government civil works including those of cantonment boards involved in the ongoing development schemes and projects launched during Financial Year 2016-17 and funded under the Annual Development Plan of the Punjab Government or funded through foreign loans where the negotiations were finalized after 1st of July 2016 or funded under Public Sector Development Program of the Federal Government or funded by the Cantonment Boards; and (b) zero per cent for all services specified at S.No.14 without input tax credit/adjustment to the extent of Government civil works including those of cantonment boards involved in the ongoing development schemes and projects launched prior to Financial Year 2016-17 and funded under the Annual Development Plan of the Punjab Government or funded through foreign loans where the negotiations were finalized as on 1st of July 2016 or funded under Public Sector Development Program of the Federal Government or funded by Cantonment Boards. |
9814.2000
and 9824.000
|
5% without input tax credit/
adjustment in respect of Government civil works and 16% with input tax credit/ adjustment for others]
|
0% | Without input tax adjustment |
| 18 | Services provided for personal care by beauty parlors, salons, clinics, sliming clinics, spas (including saunas, Turkish baths and Jacuzzi) and similar other establishments
EXCLUDING: Services provided in a parlor, salon or clinic where the facility of air-conditioning is not installed or is not available in the premises on any day of the financial year. |
9810.0000
9848.0000 9847.0000 9821.4000 and 9821.5000 [and 9815.7000 and respective headings] |
16% | 0% | Without input tax adjustment |
| 98.15 Services provided by professionals and consultants etc. | |||||
| 22 | Information technology-enabled or information technology based services including software development, software customization, software maintenance, system support, system assembly, system integration, system designing and architecture, system analysis, system development, system operation, system maintenance, system up-gradation and modification, data warehousing or management, data entry operations, data migration or transfer, system security or protection, web designing, web development, web hosting, network designing, services relating to enterprise resource or management planning (including marketing of products), development and sale of smart phone applications or games, graphics designing, medical transcription, remote monitoring, telemedicine, insurance claim processing, online retrieval and database access or retrieval service | 9815.6000
[and respective heading]
|
16% | 0% | i) Without input tax adjustment for services provided by digital platforms; and
ii) 16% for others |
| 24 | Services provided by other consultants (by whatever name called or treated, whether as consultant or otherwise) including human resource and personnel development
services, exhibition or convention services [including provision of space, equipment, accessories and other allied services], event management services (whole range and variety of their services regardless of separate or individual classification thereof), valuation services, evaluation services (including competency and eligibility testing services), certification, verification and equivalence services, market research services, marketing or sales services (including marketing agencies and on line marketing or sales services), surveyors services, training or coaching services (other than general education services) and credit rating services.] |
9815.9000
[9832.0000, 9827.0000, 9818.3000, 9818.2000, 9819.9300, 9852.0000, 9859.0000] [9825.0000, 9819.5000, 9849.0000, 9818.9000, 9853.0000, 9856.0000 and respective headings]
|
16% | 0% | Without input tax adjustment |
| 25 | Services provided by tour operators [and travel agents including all their allied services or facilities] (other than Hajj and Umrah). | 9805.5100
[9805.5000, 9803.9000] |
16% | 0% | Without input tax adjustment |
| 32 | Services provided by property dealers [and realtors] | 9806.2000, [9844.0000]
|
16% | 0% | Without input tax adjustment |
| 35 | Services provided in respect of rent-a-car [(including renting of all categories of vehicles meant for transportation of persons)] | [9819.3000 and respective headings]
|
16% | 0% | Without input tax adjustment |
| 36 | Services provided by car/automobile dealers. | 9806.3000 [and 9845.0000]
|
16% | 0% | Without input tax adjustment |
| 43 | Services provided in specified fields such as health care, gym, physical fitness, indoor sports, games, [amusement parks, arcades and other recreation facilities,] and body or sauna massage etc. | 9821.1000 and 9821.2000
9821.4000 |
16% | 0% | Without input tax adjustment |
| 44 | Services provided by laundries and dry cleaners. | 9811.0000 | 16% | 0% | Without input tax adjustment |
| 45 | Services provided by cable TV operators. | 9819.9000 | 16% | 0% | Without input tax adjustment |
| 66 | Services in respect of treatment of textile, leather but not limited to Dyeing services, Edging and cutting, cloth treating, water proofing, Embroidery, Engraving, Fabric bleaching, Knitting, Leather staining, Leather working, Pre-shrinking, Color separation services, pattern printing and shoe making services. | Respective headings
|
16% | 0% | Without input tax adjustment |
| 67 | Apartment house management, real estate management and services of rent collection. | Respective headings
|
16% | 0% | Without input tax adjustment |
| 68 | (i) Medical consultation/ visit fee exceeding Rs.1,500 per consultation/ visit of doctors, medical practitioners and medical specialists.
(ii) Bed/ room charges of hospitals exceeding Rs.6,000/- per day per bed / room |
9815.1000 and other Respective headings.
|
5% without input tax adjustment]
|
0% | Without input tax adjustment |
Points to ponder:
- Please note that PCT Codes: 9801.6000 (i.e. Ancillary services provided by hotels, restaurants, marriage halls, lawns, caterers, 9830.0000 (i.e. Race Clubs), 9862.0000 (i.e. Services provided by motels, guest houses and farm houses, [and respective headings] not mentioned in above mentioned notification against serial no 1.
- The zero rate is applicable only for services rendered as mentioned above from April 2, 2020 onwards (i.e. till June 30, 2020) and previous services to be invoiced at per previous applicable rate.
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MERGED LINK OF DOCUMENTS:
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